Gold Prices Test Lows Again as Market Awaits Trump Speech By

© Reuters. — Gold prices edged lower on Tuesday ahead of a keynote speech by President Donald Trump at 12 PM ET (1700 GMT) that is widely expected to set the tone for risk appetite this week.

Trump is due to address the Economic Club of New York in a speech that should enlarge on his thoughts about the trade dispute with China and – more immediately – whether his administration will decide whether or not to impose import tariffs on European autos. The official deadline for that latter decision is Wednesday.

European Commission President Jean-Claude Juncker and Commerce Secretary Wilbur Ross both raised hopes that tariffs would be avoided with comments last week. As such, the reaction function of haven assets may be skewed to the upside, given that consensus is for an outcome that would be bullish for risk assets.

By 10:55 AM ET (1555 GMT), for delivery on the Comex exchange were down 0.4% at $1,451.35 a troy ounce, having earlier again tried and failed to break out below the $1,450 level.

was down 0.3% at $1,450.99 an ounce.

There was little support from the bond market. Short-dated Treasuries, the most liquid alternative haven, have all but priced any further interest rate cuts from the Federal Reserve in December out of the equation. U.S. yields were flat at 1.67%. A rise of nearly 30 basis points in two-year yields since early October has greatly enhanced bonds vis-à-vis non-yielding gold.

Silver also extended its recent losses, the contract falling 0.8% to $16.67 an ounce, while fell 1.2% to $869.80.

“The mood toward precious metals has darkened significantly in the last two weeks,” said Commerzbank (DE:) strategist Christoph Geyer in a research note. “Important support levels and trends have been broken. It’s no longer a question of when new highs will be made, but whether the next support level can be held.”

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